Directors Be Alert: Vacation of Office under Section 167(1)(b) of Companies Act, 2013 By CS Snigdha Jain


Section 167 of the Companies Act, 2013, applicable from 1st April 2014, mandates a director to attend at least one meeting of Board of Directors held during the period of twelve months otherwise his absence from all meetings of Board of Directors held during above mentioned period results in vacation of Office of Director. Whereas erstwhile Companies Act, 1956 provides relaxation to Directors under Section 283(1)(g) stating that a director who seeks Leave of Absence from the Board meeting, his office cannot be vacated even if not attending any meeting of Board of Directors from a long time. The rationale behind introducing such a provision is to make directors to carry out their duties and responsibilities with due care and diligence. The Directors act as a steward of the Company which is owned by shareholders and the directors should have discharged their duties with absolute virtuosity and utmost integrity. |
The rationale behind introducing such a provision is to make directors to carry out their duties and responsibilities with due care and diligence. The Directors act as a steward of the Company which is owned by shareholders and the directors should have discharged their duties with absolute virtuosity and utmost integrity. |
(d) he fails to disclose his interest in any contract or arrangement in which he is directly or indirectly interested, in contravention of the provisions of section 184;
subsection (1), he shall be punishable with imprisonment for a term which may extend to one year or with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees, or with both.
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As cited in guidance note on Secretarial Standard on the meeting of Board of Directors issued by ICSI “A Director, who ceases to be a Director after a Meeting of the Board is entitled to receive the draft Minutes of that particular Meeting and to offer comments thereon, irrespective of whether he attended such Meeting or not. The fact that the Director has vacated his office, by any reason whatsoever, shall not affect his right to receive such Minutes.” These provisions are mutatis mutandis applicable for circulating a copy of the signed Minutes of that Meeting to the Director(s) so appointed or ceased.
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About Author
CS SNIGDHA JAIN
Qualification:
Company: HRH GROUP OF HOTELS
Location: udaipur
Member Since: 19 Sep 2018 | Total Articles Contributed: 3
About Author :
She is an Associate Member of ICSI, Bachelor in Commerce, Gold Medalist for a Graduate in Law and Masters of Law.
Write a Comment
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11-01-2019 / 08:01:31 PMReply
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Thanks.
12-01-2019 / 05:48:14 PMReply
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Hi i need one info what are consequences wen a director vacates his office under section 167 (1)(b) where the last meeting attended was Aug-2017 and his office is due on Sept-2018. Please help to undertsand if the company takes resignation currect dated.
20-01-2019 / 04:10:22 PMReply

Well written!